Earnings Update: MTN Nigeria Plc Q3 2024 – A Quarterly Recovery, However Sustainability is Key.

Event

MTN Nigeria (“the Group”) reported a net profit in Q3 2024, marking its first positive result this year after two consecutive quarters of net losses. The key driver of this shift was a significant decline decline in FX losses. However, the Group continued to grapple with inflationary pressures that kept operating expenses elevated.

Total revenue grew by 35% to N831.12 billion, propelled by double digit growth across the data, voice, fintech and digital services. Notably, this revenue growth was achieved despite the NIN-sim directive that affected subscribers base expansion during the period, resulting in a 1% decline to 77.00mn subscribers.

On a year-on-year basis, EBITDA margin contracted by 1000 basis points to 38% (Q3 2023: 48%), however, on a quarter-on-quarter basis, it improved by 600 basis points (Q2 2024: 32%). Notably, the Group’s successful renegotiation of tower lease contracts with IHS towers resulted in cost savings on a quarter-on-quarter basis, hence the improved EBITDA margin.

Outlook

We retain our BUY recommendation for the stock, however, following the incorporation of the Q3 2024 result, we revised our fair value lower to N221.17 (previous: N240.92). At the current price of N170.00, the stock trades at a discount of 30% to our fair value.

Please follow the link “MTN Nigeria Plc Q3 2024 – A Quarterly Recovery, However Sustainability is Key” to view the whole report.                                           

Thank you.